He made $400,000 flipping a house

Earlier this year,Lin He made a $400,000 profit from a single home flip.

The 3,600-square-foot house in Malibu was in foreclosure and was listed for $1.39 million. He purchased it for $985,000 in 2017 without ever stepping foot inside.

"Boy, it was bad. It was a lot worse than I thought," he said. The renovations took three months and cost him around $300,000, plus he incurred many other costs like taxes, staging and realtor commissions.

But it was worth it.

He listed the home for $1.97 million — exactly double the price he paid for it. He got a full-price offer within three weeks of listing it.

Before and after: This 3,600-square-foot house in Malibu needed a lot of work. But after it was flipped, it sold for double its sale price.

The rapid rise in home prices nationwide has made flipping more lucrative than it has been in recent years. The average gross return in the past three years was 50%, according to ATTOM. From 2004-2006, the average return on a flip was 31%.

The ratio of flipped properties to sales nationwide was 6.2% for the first three months this year, according to CoreLogic, matching the post-crash high at the start of 2013.

Banks and other institutional investors were heavy in the flipping market at that time, but these days more individuals are getting in on the action.

"There are more of these bandwagon home flippers or novice home flippers jumping into the market because home prices are going up," noted Blomquist.

But amateur flippers have their work cut out for them. The lack of inventory means prices are high and many are buying homes that need a lot of work, he added.

High home prices are a double-edged sword, and the temptation is just too great for a lot of flippers. They see prices continuing to go up they can continue to make money even though buying at high price," said Blomquist.

But flipping isn't as easy as it looks on TV.

"It's not glamorous and it's real work, dealing with gross properties," said He. "It can have the potential to give you a good return on your money, but it's not as easy as people think."